Humber/Ontario Real Estate Course 2 Exam Practice

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If a brokerage has put forth considerable effort to find a buyer for a property but the seller, who is unaware, is trying to sell privately, what is the agency relationship?

  1. The brokerage has an implied agency relationship with the seller.

  2. The seller must cover reasonable expenses incurred by the brokerage.

  3. The brokerage acts as the agent and the seller as the principal.

  4. No agency relationship is in place between the brokerage and the seller.

The correct answer is: No agency relationship is in place between the brokerage and the seller.

In this scenario, the correct answer is D. No agency relationship is in place between the brokerage and the seller. This is because an agency relationship requires mutual consent between the parties involved. In this case, the seller is unaware of the brokerage's efforts to find a buyer for the property, so there is no mutual agreement or consent to establish an agency relationship. An implied agency relationship (Option A) would require some form of acknowledgment or consent from the seller, which is not present in the given situation. While the brokerage may incur reasonable expenses in trying to find a buyer (Option B), this does not automatically create an agency relationship without the seller's knowledge or consent. Additionally, in an agency relationship, the brokerage typically acts as the agent representing the seller as the principal (Option C), but in this case, such a relationship does not exist due to the lack of mutual understanding or agreement.

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